How Phoenix's Third-Generation Wallet Reduces Fees?

Adekunle Joshua

The self-custodial Lightning wallet, Phoenix, has launched its third-generation wallet with splicing technology to reduce fees

Splicing allows for resizing channels, eliminating the need for multiple channels per user and scattering liquidity

Users now have a single dynamic channel, providing more predictability and control over incoming Lightning payments

Phoenix's splicing technology enables users to add or remove funds from their channel without future risk

With splicing, Phoenix replaces the previous 1% fee on inbound liquidity with the mining fee for the underlying on-chain transaction, offering a more transparent and cost-effective solution

The new version of Phoenix also shows the fee for sending Lightning payments in advance, fixed at 0.4% instead of a variable fee

Users can validate fees before making transactions.

Phoenix now offers trustless swaps directly in and out of the channel

Users can remove funds to a Bitcoin address or send on-chain transactions to their channel. No more reliance on trusted swap services